International Trade Finance & Investment: An Analysis of London Exchange Group

Trade Finance
&Investment

Executive Summary
The London Exchange Group, which was created by David Schwimmer on December
30 and has its headquarters in London, United Kingdom, is being considered in this research.
The corresponding agreements are with financial institutions all around the world in order to
maximise capital efficiency and manage counterparty risk. This extensive analysis will
examine how financial markets work with their counterparts in order to decrease payment
risk, and will finish with the final report's findings.

Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................4
Main Body..................................................................................................................................4
Background of Financial Markets..........................................................................................4
Capital Allocation within Domestic Economy......................................................................5
Capital Application within International Markets..................................................................7
Evaluation of an Economy.....................................................................................................9
Evaluation of challenges that the country faced due to Industrialisation and Trade Policies
..............................................................................................................................................10
Conclusion................................................................................................................................11
Recommendations....................................................................................................................12
References................................................................................................................................13

Introduction
Trade finance refers to the set of financial tools which are used by companies to
facilitate international transactions and events (Brakman and van Marrewijk, 2020). Various
parties which are involved in the business of trade finance are – banks, financial institution,
credit rating agencies and many more. The major advantage of trade finance is that it
provided flexibility in payments between two parties’ exporter and importer because it secure
the payments of both parties. Investment refers to an expenditure incur by firm in order to
purchase an asset for generating long term wealth in future. In this report, London Exchange
Group is taking into considerations which was founded by David Schwimmer on 30
December 1801, headquarter in London, United Kingdom. The respective deals with
financial institution all over the worlds to use their capital efficiency and manage counter
party risk. In this detailed report will find out how financial market collaborate with their
party in order to reduce risk of payment and finally will conclude the result from final report
(Bhoga and Trivedi ,2019).
Main Body
Background of Financial Markets
Financial markets refers to market place where trading of securities and derivatives
done at low transactional cost. The major securities which buyers and seller deals in financial
market are shares, bonds, debentures and many more. Classification of financial market are as
follows:
 Over the counter market (OTC) - It refers to the financial market in which the
securities are traded among buyer and seller without the security exchange like
NASDAQ and S&P 500. Generally the securities which are of less cost and no
regulation require are deal under respective market.
 Money market- This refers to the market where securities which have a
maturity period of less than a year are traded among buyers and sellers.
 Derivative market- This refers to the market place where trading of derivatives
are done among buyers and seller. Derivative are those financial instrument
whose value is derived from an underlying asset. This is classify under four
categories- future, forward, options and swap.
 Forex market- This refers to the market place where trading of currencies
happen among buyers and seller of different countries. Generally trading of